The study commissioned by Switzerland’s State Secretariat for Economic Affairs (SECO) found little evidence that foreign workers have become a burden on the Swiss system since the country's employment market was opened up to people from the European Union and European Free Trade Association (EFTA).
Conducted by researchers at the University of Zurich and the University of St Gallen, the newly-published report (in French here) measured how successfully foreign workers integrated into the Swiss job market in the period 2003 to 2013.
It did this by comparing both the income and employment rate of foreign workers aged 25 to 55-years-old who had spent at least five years in Switzerland with a control group of Swiss workers.
It found that foreign male workers earned 6.4 percent less than their Swiss peers when they arrived in Switzerland but actually made 1.2 percent more after just one year. After five years, they were earning 1.9 percent more than the control group of Swiss men.
The authors of the study said it was not possible to draw conclusions on why foreign male workers’ salaries caught up with their Swiss peers, but speculated better language skills, a larger professional network and a deeper understanding of the Swiss job market could all play a role.
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The authors also noted that changing jobs was also likely to have played a “not negligible” role in increasing salaries, given opportunities for advancement within the same firm were limited.
They also noted that a small number of high-earning executives may have skewed the results but said that a breakdown of the data showed foreign workers with lower levels of education were also catching up with Swiss workers.
For women, the difference in salaries was much more pronounced. Foreign female workers earned 0.9 percent more than Swiss women when they first arrived in Switzerland and after five years, these women were earning a full 20.8 percent more than Swiss women.
Employment rate divide
For foreign male workers, the employment rate was 16.3 percentage points lower than their Swiss counterparts on arrival in the country but that gap had narrowed to 3 percentage points after five years, with the difference down to higher unemployment rates among foreign male workers.
In the case of women, the gap remained larger. The employment rate for foreign female workers was initially 26.8 percentage points lower than for Swiss women and was still 12.3 percentage points lower after half a decade.
Explaining this gap. the study authors speculated were more likely to have come to Switzerland under family reunification programs and were also more likely to be raising children at home. They cite the increasing employment rate for foreign female workers over the five-year study period as evidence of this.
Falling number of arrivals from EU
This latest study comes in the wake of a similarly positive report published by Seco in July which found the arrival of EU and EFTA workers had not pushed up down Swiss wages.
Switzerland experienced real wage growth of 0.7 percent a year from 2002 to 2017, the agency said in that report. Nominal wage growth had been lower from 2009 to 2017 than in the years before the economic crisis but this had been offset by negative inflation.
The Seco report also net migration to Switzerland from EU and EFTA countries in 2017 was 31,250, down 11 percent on 2016 and 54 percent lower than the record number seen in 2013.
In addition, the report highlighted the fact around 50 percent of workers who arrived in 2009 had left by 2014.
But the July report did also note that the unemployment rate among EU and EFTA workers in Switzerland was a relatively high 5.5 percent in 2017 against the overall Swiss rate of 3.3 percent last year.
Both reports come as Switzerland tries to draw up a new framework agreement with the EU on relations between the Alpine country and the bloc. Switzerland’s wage protection measures, designed to ensure foreign workers do not push down high Swiss salaries, remain a stumbling block in the protracted negotiations.
Switzerland needs foreign workers to cover skills shortages but there are continued fears that Swiss wages are under threat as a result.
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